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The Mirage of Mexican Guest Workers

Everybody Wins?

For decades now, the unlawful migration of millions of Mexican nationals into the United States has been a source of sometimes passionate disagreement on both sides of the border. In the past year, new presidents have come to power in the two countries and have given priority to addressing the issue. President Vicente Fox, who refers to unauthorized Mexicans in the United States as “heroes,” has pledged to negotiate both a temporary labor program to bring Mexican workers legally to the United States and a large-scale “regularization of status” for some or all of the millions of illegal migrants already living there. President George W. Bush, who expresses real interest in Mexico and high personal regard for his Mexican counterpart, has reciprocated Fox’s willingness to reach an agreement. Bush sees a potential benefit to U.S. agricultural employers in a Mexico-U.S. guest worker program, and his administration has floated the possibility of legalizing millions of Mexicans unlawfully resident in the United States in conjunction with such an initiative.

Bush has received support from some Republican and Democratic lawmakers on Capitol Hill, where congressional camps have rallied around three distinct proposals. The first, most expansive plan would legalize or give amnesty to some or all of the illegal Mexican immigrants on U.S. soil. A second approach would grant guest or temporary work visas for a specified time period, on the understanding that the workers would leave the country when their visas expired. Finally, an “earned legalization” program would grant temporary legal status and create a way for individual migrants to earn permanent legalization by fulfilling certain conditions, such as 90 to 150 days of farm labor within a year of receiving a guest visa.

In August, Mexican and U.S. negotiators reached preliminary agreement on proposals involving the latter two concepts. Their plan would bring in guest workers to fill niches in agriculture, hospitality, and food service—sectors that already employ a large proportion of the illegal Mexican immigrants in the United States. The guest workers could then seek permanent legal status by “certify[ing] that they have been living and working in the country for a specified time, and have been paying taxes.” When Fox visited Washington in early September, he surprised the White House by publicly calling for a final accord by the end of the year; Bush administration officials reaffirmed their commitment to the talks but said Fox’s timetable was too optimistic. The September 11 terrorist attacks on the World Trade Center and the Pentagon then pushed the issue into the background, although political proponents have not given up.

The theoretical benefits of temporary labor programs have seduced politicians in many countries, just as they are now enticing the Fox and Bush administrations. Many U.S. and Mexican proponents seem surprisingly unaware, however, of the long and checkered history of such policies, and quite innocent of the unwanted effects they have produced in both origin and destination countries. The negotiators are advancing the discussions and making decisions with a dangerously myopic perspective on their consequences.

U.S. and Mexican advocates promote temporary worker programs as a “win-win” game. According to their arguments, U.S. employers would benefit from a guest worker program because they would obtain legal access to workers who would accept low wages and be unlikely to unionize. At the same time, the temporary Mexican workers would win jobs at wages far higher than those available at home. Proponents in Washington hope to supply low-cost workers to influential employer groups who provide substantial campaign contributions. And although some policymakers are willing to include the “earned legalization” provision called for by the Mexican government and some U.S. advocacy groups, others assume they could design a guest worker program to make the Mexican workers “temporary” and “returnable,” ineligible for social services, and unable to gain citizenship. For their part, Mexico’s politicians hope to gain votes by providing a new source of jobs to the country’s underemployed work force. In addition, the government hopes to gain economic benefits from the extra dollars their workers send back home, and to increase its political leverage in the United States.

Reality Check

The only problem with this “win-win” scenario is that it will not work. Bush’s proposal ignores the fact that virtually no low-wage “temporary worker” program in a high-wage liberal democracy has ever turned out to be genuinely temporary. On the contrary, most initially small (and often “emergency”) temporary worker programs have grown much larger, and lasted far longer, than originally promised.

This tendency toward permanence is easily explained—guest worker programs are virtual recipes for mutual dependence between employers and the migrants who work for them. Employers naturally grow to depend on the supply of low-wage and compliant labor, relaxing their domestic recruitment efforts and adjusting their production methods to take advantage of the cheap labor. History has shown that in agriculture (where many Mexican guest workers would be employed), a pool of cheap workers gives farm owners strong incentives to expand the planting of labor-intensive crops rather than invest in mechanized labor-saving equipment and the crops suitable for it. Thus, although the labor supply is supposed to be available only temporarily, farmers adapt in ways that ensure their continued need for workers willing to accept such low wages. On the other side of the coin, those bargain wages for employers are a boon for the “temporary” workers, who earn much more than they could at home. For instance, laborers in U.S. fruit and vegetable agriculture make between $5 and $7 an hour, as opposed to 50 cents an hour in Mexico. Past guest worker programs have shown that the participants and their families grow accustomed to the increased income; they therefore have no incentive to return home unless rapid economic and job growth there creates commensurate opportunities. As the workers’ “temporary” sojourns extend over time, the odds of their ever returning to their homeland diminish, and young people in the home country come to regard employment abroad as normal.

Meanwhile, the promised “win-win” outcomes for politicians have often turned out to be as illusory as the temporary nature of the work. For the countries that send their surplus labor abroad, the eagerly awaited worker remittances bring decidedly mixed economic blessings: the country receives needed capital, some of which is productively invested, but the influx of cash drives up real estate prices, stimulates conspicuous consumption of imported goods, and is unevenly distributed. The remittances also tend to decline over time, unless the number of new emigrants continues to grow. So the source country earns capital temporarily but loses many emigrant workers permanently. To make matters worse, the anticipated enhancement of political influence in the destination country has proved disappointing and often double-edged. As a result of their past migrant labor programs, for example, the United States and Germany do pay more attention to Mexico and Turkey, respectively, than they might otherwise. But the Mexican and Turkish governments have also found themselves more vulnerable to domestic U.S. and German politics. In addition, migrants abroad have often mobilized politically in opposition to the government of their home country. In February 1999, for instance, Turkish commandos’ arrest of Kurdish rebel leader Abdullah Ocalan at the Greek ambassador’s residence in Nairobi inspired protests by Turkish Kurds in cities across Europe.

Fox may be aware of these dangers, but he has still seen political advantages in promoting a temporary labor program. His repeated promises to negotiate a more expansive immigration policy with Washington helped him during last year’s presidential campaign, and he seems to believe that achieving such an agreement for Mexican “heroes” would win votes for his National Action Party in the next elections.

For the host country, the permanent settlement of guest workers also tends to requires greater spending on social services than the government initially anticipated. Many workers find ways to bring their families to join them, creating a large pool of poorly paid and often undereducated people. They, along with any children born in the host country, require government-financed services such as public education and health care. In the United States specifically, the settlement of millions of Mexicans would increase the numbers of U.S. residents who lack health insurance and rely on publicly financed clinics and other safety nets. Finally, political leaders have often belatedly discovered that admitting temporary low-wage workers unnaturally sustains industries with low productivity and wages, such as garment manufacturing, labor-intensive agriculture, and domestic services. In consequence, the economy’s overall productivity and growth suffer.

Strong Arms

Proponents of a new Mexico-U.S. temporary worker program often portray it as a legal and humane alternative to what has become a huge problem—the unauthorized mass migration of Mexicans to the United States. Such advocates seem blind, however, to the unequivocal lessons of history. Far from mitigating illegal migration, the two countries’ last major temporary worker program actually initiated and accelerated its flow. During the so-called bracero (“strong-armed one”) program from 1942 to 1964, the number of unauthorized Mexicans slipping across the border actually expanded in parallel with the number of authorized temporary workers; the illegal flows then continued to accelerate after the program’s termination.

The Franklin Roosevelt administration initiated the “temporary wartime emergency” bracero program to provide field labor to southwestern farmers whose farm hands had been drafted. The actual number of bracero admissions during World War II was quite small. Still, by 1945 bracero recruitment networks had become well established, and California and Texas farmers had grown accustomed to the easy availability of Mexican workers who happily accepted wages far below U.S. standards. These employers lobbied hard, and successfully, for the continuation of the “wartime emergency” program beyond the war’s end. By 1956 bracero admissions had increased to 450,000 a year—more than seven times higher than the wartime peak — to the detriment of U.S. farm workers, who suffered rising unemployment during this period.

During the 1950s, it became evident that the bracero program was also promoting an influx of unlawful Mexican migrants. U.S. authorities apprehended 3.6 million of them between 1950 and 1959, more than double the 1.4 million caught in the preceding decade. This unhappy circumstance, coupled with increasing evidence of abuses of bracero workers by employers, led to a long and contentious political battle to terminate the program. Farm employer advocates were able to block repeal until 1964, when the program finally ended. By 1970, apprehensions of illegal Mexican aliens had fallen by more than 50 percent, prompting hopes that the problem had been contained. But this respite was short-lived. The numbers of unauthorized Mexicans crossing the border began resurging in the 1970s, and apprehensions have continued to rise right through to the present day, reaching 14 million over the 1990s.

Today, scholars largely agree that the 22 years of bracero employment created the conditions for the subsequent boom of unauthorized Mexican migration. To minimize transportation costs, U.S. employers had encouraged prospective bracero workers to move to Mexico’s sparsely populated northern region, thereby swelling Mexican border cities that offered little local employment. Meanwhile, workers seeking American jobs had learned they could save the large fees and bribes normally paid to bracero recruiters in Mexico by simply crossing the border illegally. Blending in with the legitimate braceros, they could then find a job on their own and eventually get a U.S. work permit.

Although the program’s unwanted consequences were already evident during the 1950s, it continued to operate largely because of the political pressure applied by U.S. interest groups who were profiting from the availability of cheap and compliant Mexican labor. This ready supply let southwestern farmers greatly increase their production of high-profit, labor-intensive crops. Sales of California- grown vegetables, for instance, soared 50 percent over the 1950s, as the costs of production in California declined relative to other U.S. regions. Meanwhile, even though real wages for the state’s farm workers barely rose, factory wages increased significantly. Mexican- American farm workers responded by moving to urban areas with better- paying jobs, thereby increasing farmers’ avowed need for more imported braceros.

The termination of the bracero program in 1964 provided a powerful opportunity to assess the arguments that had kept it going for so long. California farming groups had contended that without the braceros their crops would rot in the fields for lack of Americans willing to harvest them, and that food prices would rise as a result. They focused these claims on the state’s large crop of “processing tomatoes” (used for ketchup and canned tomato products). Taking up the cause, California Farmer reported in 1963 that if the flow of braceros stopped, tomato growers and canners “agree the State will never [again be able to plant] the 100,000 to 175,000 acres planted when there was a guaranteed supplemental labor force in the form of the bracero.”

Reality, however, never confirmed these dire predictions. In 1960 some 45,000 farm workers (mostly braceros) had harvested 2.2 million tons of processing tomatoes. By 1999, it took only 5,000 workers to operate machinery that harvested some 12 million tons. Thanks to these efficiency gains from mechanization, the real price of processing tomatoes declined 54 percent while per capita consumption rose 23 percent.

The rise in farm workers’ wages following the bracero program’s termination also showed how much it had depressed wages. In 1966, Cesar Chvez and his fledgling United Farm Workers union won a 40 percent wage increase from table grape growers in the San Joaquin Valley of California who could no longer use braceros to counter the union’s strike. These economic gains were later lost as the size of the unauthorized farm worker population soared.

Today farm lobbies routinely report “farm labor shortages,” yet the unemployment rate in the country’s primary labor-intensive agricultural region, the Central Valley of California, is exceptionally high—12 to 15 percent in June 2001—compared to the national average of between 4 and 5 percent. Indeed, even as labor shortage claims resonate in Washington, Central Valley officials are actually offering money to welfare recipients who agree to move to other states.

Guests Who Come To Stay

Other countries have had similar experiences with temporary work programs. During the 1960s boom phase of West Germany’s postwar “economic miracle,” German employers won government permission to recruit “guest workers” (Gastarbeiter) for assembly-line work from countries with a labor surplus (initially Italy, then Yugoslavia, and later Turkey). The program was promoted as temporary, “rotational,” and mutually beneficial: the guests would work for one or two years in Germany and then return to their home countries with savings and new skills.

As with the bracero program, the initial flow began slowly. But by 1973, Germany was employing 2.6 million guest workers, including about 600,000 Turks and 500,000 Yugoslavs. As the numbers grew, so did the criticism. Economists began reporting that the program was slowing investments in automation and mechanization, so that “Japan [was] getting robots while Germany [got] Turks.” Moreover, it was becoming obvious that “guest” workers were turning into permanent immigrants.

When the oil shocks of 1973 sharply increased German unemployment, especially among guest workers, the government decided to end further recruitment. But most unemployed guest workers declined to “rotate” back to their home countries, knowing that as bad as things were in Germany, the job prospects in Turkey or Yugoslavia were even bleaker and the social safety nets less generous. Instead, the Gastarbeiter exercised rights accrued from living several years in Germany to arrange for their families to join them, despite efforts by German authorities to discourage such family reunification.

A relatively short-lived guest worker program thus unintentionally turned Germany into a reluctant host for permanent immigration. German officials were slow to realize that workers from low-income countries cannot be expected to rotate in and out of high-wage assembly-line jobs. The “guests” imported for temporary work in a time of need were transformed into permanently resident foreigners. Many of their children and grandchildren who today live in Germany have been unable to obtain German citizenship, so they are officially classified as “foreigners.” These foreigners experience strikingly high rates of unemployment and welfare dependency: as of July 2001, 17.1 percent of the 2.6 million foreign workers in Germany were unemployed, almost double the 9.2 percent national rate. These numbers do not include other large categories of foreign-born residents in Germany: the masses of asylum-seekers from southeastern Europe are generally not permitted to work, and newly arrived ethnic Germans from Russia and eastern Europe are considered German citizens. About 8,600 so-called “green-card” visa holders have been recently admitted for temporary, high-skill labor, but they are required by law to have a job in order to enter and remain in Germany. Now, as debates over immigration policy have risen to the fore of German domestic politics for a variety of reasons, the unhappy legacy of the temporary labor program ranks prominently among people’s concerns. Germans are forced to question how the second- and third-generation offspring of former guest workers will successfully integrate themselves into German society and the labor market.

These political contentions have even affected German foreign policy, especially its willingness to admit new nations into the European Union. German policymakers feel palpable concern that admission of countries with labor surpluses, such as Poland or Turkey, would result in large inflows of unskilled foreign workers to Germany. Proponents of the German guest worker program had claimed it would hasten European integration, but the outcome may turn out to be exactly the opposite.

Leap of Faith

Given this troubled history, one might wonder why some politicians are now proposing yet another guest worker program for the United States. Part of the explanation is the need to find an alternative to the failed compromise measures of the past 15 years. In 1986 and 1990, lawmakers reformed immigration controls and law enforcement mechanisms in ways that were supposed to clamp down on the use of fraudulent documents to claim work permits and social services. These measures, initially branded sufficient to bring illegal immigration from Mexico under control, have in reality been so limited by weakening amendments and ineffectual enforcement that many additional millions of Mexicans have taken up unlawful residence over the last decade and a half. In addition, U.S. fruit and vegetable producers, aware that half of their field workers may be unauthorized, hope to “lock in” access to low-wage Mexican workers before the U.S. economy weakens further and opposition grows.

None of the three major proposals currently under discussion in Congress, however, promises to remedy the problem of future illegal Mexican immigration. A limited guest worker plan would permit unauthorized Mexicans already in the United States to obtain seasonal or year-round work permits, while a legalization-only approach would grant temporary or permanent legal status to those unlawfully resident before a specified year (e.g., 2000) and then roll this date forward a year at a time. Both schemes fail to address the question of unauthorized migrants who would inevitably keep entering the country after the laws took effect.

The third set of proposals, combining temporary labor with a form of permanent earned legalization, would simply continue the dismal U.S. track record with such initiatives. A 1986 immigration reform act, for example, led to the legalization of 2.8 million unauthorized foreigners in 1987 and 1988. Almost half of these qualified under the Special Agricultural Worker (saw) program, which granted immigrant status to unauthorized farm workers who submitted letters from employers stating that they had worked at least 90 days in the preceding year. The requirements of proof were so loose that perhaps half the claims were based on fraudulent documents, yet the law made even flagrant fraud difficult to challenge.

The saw legalization was based on a theory (or, more accurately, a hunch) that legalizing migrant workers and controlling the flows from across the border could bolster declining farm wages and benefits. Farmers would have to raise wages and improve working conditions to keep saws from leaving for the other potential jobs to which their new legal status entitled them. For a short period, this theory appeared to work: in 1989, more than a third of U.S. crop workers were saws, and the share of unauthorized workers was less than 10 percent. But the law’s ineffective enforcement provisions allowed more unauthorized migrants to enter the country and find farm work. Within a decade, most saws (as well as other legal immigrants and U.S. citizens) had left agriculture for better-paid employment, and more than half of the farm labor force was again unauthorized.

The current proposals for earned legalization presumably seek to slow the exit of newly legalized workers from agriculture. They seem quite unlikely to be effective, however, since this would require the U.S. government suddenly to become capable of preventing such workers from simply buying fraudulent documents, as many did during the saw legalization. Moreover, the prospect of earned legalization through agricultural work could render temporary aliens more dependent than ever on farm employers.

A second explanation for the current vogue of temporary labor programs is the odd nature of immigration politics in the United States. Choices about immigration have long been controlled less by logic than by unorthodox coalitions that bring together otherwise antagonistic regional, ideological, economic, and ethnic interest groups. Indeed, the recent spate of proposals has come from certain conservative Republicans and liberal Democrats alike. Both imagine that their support for such policies will win them large numbers of additional political supporters among current citizens and the legalized Mexicans who will seek naturalization. Conservative proponents believe that regularization or legalization would increase the number of voters who favor their social and cultural values, such as dedication to religion, opposition to abortion, and reliance on the self and family rather than on government. Meanwhile, their liberal opposites anticipate a swelling of their own political constituencies with supporters of such issues as income redistribution, labor rights, and affirmative action.

The enthusiasm of groups who would be directly affected by the legislation is easy to comprehend. The benefits, although quite small for the overall economy, are potentially large and immediate for the relevant employers and ethnic lobby groups. And the costs, although substantial, would be widely diffused, deferred, and financed by federal and local tax revenues. The politics of immigration policy is therefore being driven by small, concentrated, and well-financed interest groups that stand to gain significantly in the short term.

The political fallout from a guest worker program is less clear; indeed, advocates from opposing parties have made conflicting predictions of one-sided political gain that are based on contradictory analyses of a guest worker program’s effects. In truth, no one has any concrete way of knowing which ideology or political party would gain the most from the proposals currently on the table. For all concerned, this is a high-stakes political gamble based on hunches and promises rather than on credible evidence.

Guest worker and legalization programs are also attractive to politicians in Washington because, in theory, they offer a way to control illegal immigration without making tough and politically difficult choices. Such programs are based on the assumption that the United States needs to bring in outside workers, since the migrants who slip in illegally manage to find jobs anyway. So a guest worker policy is intended to bring this illicit, unorganized mass migration under government control and put it to economic use by actively importing temporary workers and defining their place in the economy. Past experience has shown, however, that these guest workers often manage to escape the program’s constraints and find ways to settle down. If they and their children become legal permanent residents and eventually U.S. citizens, they are themselves likely to need substantial public and private resources. Hence what is today in effect a special subsidy for farmers, meatpackers, and families that hire nannies can become a large obligation financed by all Americans.

Proponents of both guest worker and legalization proposals have argued that they would increase unionization and tax payment by illegal workers. The law currently allows both guest workers and illegal aliens to join unions, and both groups are required to pay taxes. Both categories, however, are much harder to unionize and less likely to pay taxes than are U.S. citizens and legal immigrants in regular employment. Legalization might embolden migrant workers to join unions in larger numbers and make legalized immigrants more willing to pay taxes. Yet neither of these outcomes came true after the 1987-88 legalization.

Even the basic presumption that the United States cannot supply enough workers to meet employers’ demands is flawed. This idea has arisen only from Washington’s failure to enforce its own immigration laws, thereby exposing a few limited sectors of the U.S. economy to large numbers of Mexicans willing to work for below-market wages. Employers in these sectors have evolved a mutual dependence with Mexican workers, which feeds the ongoing cycle of illegal migration.

Coming To America

The best way to deal with this mutual dependence is to begin effectively enforcing the legal prohibitions on employment of unauthorized migrants. At the same time, authorities should begin ensuring that employers in agriculture, domestic services, and restaurants and hotels abide by minimum-wage and working-condition regulations. Finally, Washington must modify legislation that perversely favors migrants willing to take temporary jobs over U.S. workers seeking regular employment. For example, current law offers a large economic incentive to employers who hire temporary workers by exempting the wages paid to temporary employees from Social Security contributions and unemployment taxes. This provision essentially allows migrants who take temporary jobs to undercut the wages and working conditions of U.S. workers. To level the playing field, employers of temporary workers should be assessed a user fee equivalent to the Social Security and unemployment taxes they would have to pay for regular employees. The government could use the revenues to help employers who depend most on migrant workers, particularly small and labor-intensive businesses, to develop alternative employment or production practices. It could also assist the U.S. workers who must compete with migrants for jobs.

These policy changes would counter the forces driving the current push for a Mexican guest worker program and temper the negative consequences if such a program is implemented. First, better enforcement of immigration laws would reduce the supply of unauthorized Mexican workers and, consequently, wean employers in certain economic sectors away from their dependence on migrant labor. At the same time, reforming current employment regulations would take away the policy imbalances that favor temporary workers—whether they enter the country themselves or through a guest worker program – – over those seeking regular employment. Without such an equalization of economic incentives, employers will learn to exploit the rules of any guest worker program just as they have exploited the supply of unauthorized migrants, and they will cease to look for alternatives involving domestic recruitment or investment in more efficient production.

Heavy Baggage

While policymakers weigh ephemeral benefits, many groups stand to lose in the gamble currently under consideration. Regarding the idea of legalization, in 1992 the bipartisan U.S. Commission on Agricultural Workers concluded that “the concept of a worker- specific and industry-specific legalization program was fundamentally flawed.” As to guest workers, in 1997 the bipartisan U.S. Commission on Immigration Reform reported to the president and Congress with a unanimous voice that adoption of a new temporary worker program “would be a grievous mistake.” There is little reason now to second- guess these well-founded analyses.

People, as Adam Smith once observed, are “the most difficult baggage to transport over borders.” Importing labor is far more complicated than importing other factors of production, such as commodities or manufactures, precisely because labor is not simply a component of the production cycle. Migration involves human beings, with their own beliefs, politics, cultures, languages, loves, hates, histories, and families—none of which accompanies imported goods. This extra baggage carried by imported temporary workers means that many of them, enjoying the greater income and higher quality of life away from home, do not wish to remain temporary. Those who manage to stay in the host country thus cease to be simple factors of production, creating an unexpected segment of the population that the government must accommodate.

The terrorist attacks of September 11 force a rethinking of U.S. policies on the admission and residence of foreign nationals, policies that are neither well designed nor effectively enforced. As the country begins to free itself from the disorder of current immigration policies and to consider what changes would be constructive and sustainable, policymakers must understand that proposals for new guest workers and legalization policies for unauthorized immigrants would resolve none of the current problems. They would only make the situation a great deal worse.

In many countries, under many types of government, and across many time periods, experiences with guest worker programs have led to an overwhelming and simple consensus among those who have studied the issue: there is nothing more permanent than temporary workers.